Another ownership question

There are a lot of variables, but it usually works out that the "break even"
point between owning and renting is around 150-200 hours/yr. But if you can
fly 100 hours or more, the costs are close enough that the overwhelming
benefits of ownership (predictability, scheduling, flexibility, pride, etc.)
make it a great way to go, provided you want and have the extra time to
spend managing the ownership aspects (maintenance, keeping it clean,
paperwork, etc.).

Below 100-hours, ownership really doesn't make economic sense so I advise
people flying the typical 50 or 75 hours per year to try and find a 2- or
3-way partnership.

- Mark

reo@roscoe.airaffair.com (Ross Oliver) wrote:

> Duane MacInnis <duanemac@telus.net> wrote:
> >Beautiful part about older (but serviceable) airplanes, is that they
> >actually *appreciate* in value.
>
> I would like to see some hard data to support this claim. While this
> was true of certain aircraft in the late '80s and early '90s, once
> Cessna restarted production and Cirrus and Diamond are now delivering
> in significant numbers, I seriously doubt this still holds true.

I paid $32.5K for my 1972 Skyhawk in 1992. Book value is now around
$40K, including the additional hours put on the plane in the last 11
years. Not lots of appreciation in value but clearly greater than
zero.

Jim Rosinski
N3825Q

I fly about 75 - 100 hours a year. I own a '65 Skyhawk/IFR/180HP. I
agree, the hours do not meet the financial requirements on owning, but
there is something to be said that MY plane is in the hangar with I want
to fly, and I do not have to try and schedule a plane after a week of
bad weather, only to have everybody else trying the same thing.

Partnership would be an alternative, maybe.

markjen wrote:
>
> There are a lot of variables, but it usually works out that the "break even"
> point between owning and renting is around 150-200 hours/yr. But if you can
> fly 100 hours or more, the costs are close enough that the overwhelming
> benefits of ownership (predictability, scheduling, flexibility, pride, etc.)
> make it a great way to go, provided you want and have the extra time to
> spend managing the ownership aspects (maintenance, keeping it clean,
> paperwork, etc.).
>
> Below 100-hours, ownership really doesn't make economic sense so I advise
> people flying the typical 50 or 75 hours per year to try and find a 2- or
> 3-way partnership.
>
> - Mark

Long-term (over the past 50 years or so), airplanes have generally
appreciated at the overall inflation rate. So they aren't great investments
per se, but they don't dramatically lose value like cars, motorcycles,
boats, etc. like most depreciating assets. This assumes you put some money
back into the airplane for capital improvements (paint, avionics,
upholstery, etc.). Include this and it doesn't look so good. They're about
halfway between a car and a house.

As with all things, you have to ride out the downs to get to the ups. My
aircraft increased in value about 65% between purchase in 1991 and 2001
(about a 5% annual appreciation rate), but has lost $20K in the last two
years. So overall, it has averaged 3%/year. I consider this a little high
since the runup in the late-90's was unprecedented. So 2-2.5% is probably a
good long-term average to expect. And that's about the inflation rate over
the period.

- Mark

ks_av8r wrote:


> Another one, is if after a year or so, if it isn't getting the flying time
> for break even, you can always consider a co-ownership at that time and
> sell
> 1/2 of it.

Another factor to consider, beyond hours flying, is the hours spent with the
aircraft sitting away from home. Renting, this costs. Owning, it's free.

That's a "column" that pushed me heavily towards club membership (something
like ownership with training wheels {8^).

- Andrew